cherry waiting to be picked

PEN is capitalised at US$40 million with a 20-50 million lbs pending initial Jorc (up 100 million est. finally) DYOR

It's initial plant set-up is expected to be US$40 mil with mining/processing costs as low as US$15 per lb.

Compare with BMN with a (lower grade cutoff) resource of 160 million lbs. Setup costs of $555 million and opex of $38 per lb. (They'll need to dilute the shareholdings considerably to raise these kind of funds)

Latest reports (DYOR) say even with such large overheads BMN is profitable with the Uranium price of $60. However with a shift up in uranium price to $80 per lb there share value would skip from 24 cents to $1.77 ! (Currently around 70 cents after a big fall from $1.20) The report advises that this stock's success depends on uranium price increases over the next while.

If these are the economics of an unwieldy operation like BMN, imagine where the PEN share price will be firstly, when the JORC is in, secondly when a production plan (and ultimate JORC) is finalised, thirdly when production begins and finally, if the uranium price tips over $100.

Notwithstanding it's Karoo holdings PEN is practically immune from competition on uranium sales. It can undercut the leanest operation around (IMHO) and still generate a minimum tenfold share price increase over 20 months (IMHO)

My excitement is in the de-risked nature of PEN at the macro-economic and plant/resource level. It's increasing share price into 2010 will allow minimum share dilution as capital is raised for 2011, or....a partner jumps on board (Very likely IMHO)

At under 10 cents PEN is a cherry waiting to be picked.

Thanks HS for the clues for further research PM